It's Tax Time Again!
Most of us have already organized our yearly paperwork and filed our W2 in order to complete our 2018 tax returns. However, many of us procrastinate and have yet to even start. If you are one of these people, do not panic there is still time to get everything done and hopefully receive a large return. Below you will find some simple tips to ensuring you get your taxes filed prior to the deadline on April 15th.
Organize your Paperwork
The most important paper we use to correctly file our tax return is the W2 that our employer provides. This is a simple summary of earnings and withholdings for the year we are reconciling. Most people focus on this; however, there are a lot of other papers that you need to file your tax return. Did you know that if you are a home owner you can use the interest you pay on a mortgage as a write off? In order to do this you simply need to know how much money you spend paying interest. Your bank should have sent you a form with this information. Do you know where it is? If not look for it or call your bank for another copy. You can file your tax return without it but why would you want too. Furthermore if you are self employed or own your own LLC there are other forms required to properly file your taxes. Your company’s accountant should be able to provide you with everything and it is important you have these in addition to your W2 when it comes time to file a tax return.
Determine how to Prepare the Return
There are many different ways to prepare a return to file. You can do it yourself, use a computer program, or hire a number of companies or people to do it for you. If you chose to prepare your own tax return, it is important to do a little research first. Every year there are a number of new tax laws. A number of them are unlikely to apply to you but knowing there are changes is important. Make sure you are up to date on the latest laws to ensure an accurate filing. The digital age has also provided a new way to prepare taxes. There are a number of websites or computer programs out there that sell tax preparing services. These programs can be purchased for a small fee and all you have to do is answer some questions and the software takes over. These programs are accurate and often offer a guarantee for accuracy. Finally, you can always hire an accountant or use a firm to prepare your taxes. This avenue is simple to understand. You get all your paperwork and give it to a professional who then files your taxes on your behalf. Some companies will even give you your refund, minus the processing fee, up front. There is no wrong way to prepare your taxes you just have to pick what method works best for you and pay the fees associated with the option you choose.
Plan for the Cost or Refund
A lot of people will receive a refund and a lot of people will also owe the government money based on the results of your tax filings. Be prepared to deal with it either way. If you pay attention to your withholdings during the year or you have not changed jobs recently you should have an idea of what to expect. However, if there has been a job change or a life change, like having a baby, this could impact the results of your tax filings. If you have a large amount withheld from your paychecks it is time to think what you can do with a return. You can pay off bills or use the money to buy something you have had your eyes on for a while. In addition, a lot of families use tax return money to pay for a great family vacation. However, don’t assume you will get a refund. If you withhold the minimum amount on your paycheck then you might have to plan a way to pay the government. The IRS will get its money so if you end up owing do not avoid paying. The government always gets its cash. Look at your withheld money and prepare to pay if you have not paid your due on a paycheck basis. Look at your pay stubs and know what to expect so you can plan accordingly for it.
Don’t Wait until the Last Day
It is an awful experience to go to the post office on April 15th and it is an experience that can easily be avoided. You can start your taxes in January and they are not due until mid April. By waiting until the last minute you only cause avoidable headaches. Even if you have not started yet you still have plenty of time to get your taxes done before they are due. It only takes a day or two to get your taxes prepped and prepared to file. If you have not started, start now, you can still avoid the last minute craze. Do not spend time or energy worrying about your taxes. You are going to have to get them done and pay or receive a refund either way. So do not procrastinate and get them done this week. This will leave you plenty of time to save money to pay or to make plans for your anticipated refund. Tax time can be annoying and even scary, don’t worry about it and get it done. It’s part of life in the great country we live in.